Australian Bureau of Statistics
Celebrating the International Year of Statistics 2013

THE AUSTRALIAN DOLLAR

The trade weighted index measures change in the value of the Australian dollar relative to our major trading partners. All other things being equal, Australia becomes more competitive if the value of our dollar falls relative to the currencies of our competitors.

Over the past three decades there has been a fair degree of movement in the value of the Australian dollar against our main trading partners. The trade weighted index fluctuated from a peak of 131 in 1982 to a low of 72 in 2001, with the index at 86 in 2009.

New weights, which reflect the composition of Australia's two-way merchandise trade in 2008-09, are applied to the trade-weighted index in 2009-10. The Chinese renminbi had the highest weight (19%), followed by the Japanese yen (17%), the Euro (10%) and the United States dollar (9%). The weight of both the Chinese renminbi and the Japanese yen represented an increase of two percentage points from 2008-09, while the Euro and the United States dollar fell by one percentage point (RBA 2009).

The combined weight of the Asian-Pacific currencies, excluding the Japanese yen, increased to 53%, reflecting the growth of merchandise trade between Australia and the Asia Pacific region (Endnote 1) (RBA 2009).

In recent years the value of the Australian dollar has generally increased relative to the currencies of our major trading partners. In 2008-09, the Australian dollar was stronger against the value of the UK pound than it had been at any time in the previous 10 years (and represented a 16% rise since 1998-99). Between 1998-99 and 2008-09 the Australian dollar also rose 23% relative to the US dollar, despite falling by 16% between 2007-08 and 2008-09 (ABS 2009).